Byers Corporation, which produces cellular transmission towers, has provided the following data:

Byers Corporation, which produces cellular transmission towers, has provided the following data:

	Budgeted production.................................	2,500	towers
	Actual production......................................	2,800	towers
	Standard machine-hours per tower............	6.8	machine-hours
	Budgeted machine-hours (6.8 × 2,500).....	17,000	machine-hours
	Standard machine-hours allowed for the actual output (6.8 × 2,800).....................	19,040	machine-hours
	Actual machine-hours................................	18,380	machine-hours

	Budgeted variable overhead cost per machine-hour:
	Indirect labor.........	$7.40	per machine-hour
	Power.....................	$1.40	per machine-hour
	Actual total variable overhead costs:
	Indirect labor.........	$139,660
	Power.....................	$26,212

    104. The variable overhead efficiency variance for indirect labor is:

            A)      $4,884 U

            B)      $4,884 F

            C)      $1,236 F

            D)      $1,236 U

           

            Ans:  B    

            Solution:

           

            Budgeted machine-hours: 17,000

Actual machine-hours: 18,380

Standard machine-hours allowed: 19,040

		Cost Formula (per MH)	Budget Based on 18,380 MHs	Budget Based on 19,040 MHs	Efficiency Variance
	Variable overhead costs (Indirect labor)........................	$7.40	$136,012	$140,896	$4,884 F

    105. The variable overhead efficiency variance for power is:

            A)      $444 F

            B)      $444 U

            C)      $480 U

            D)      $924 F

           

            Ans:  D    

            Solution:

           

            Budgeted machine-hours: 17,000

Actual machine-hours: 18,380

Standard machine-hours allowed: 19,040

		Cost Formula (per MH)	Budget Based on 18,380 MHs	Budget Based on 19,040 MHs	Efficiency Variance
	Variable overhead costs (Power).................................	$1.40	$25,732	$26,656	$924 F

Use the following to answer questions 106-107:

Czlapinski Corporation, which produces highway lighting poles, has provided the following data:

	Budgeted production.................................	1,000	poles
	Standard machine-hours per pole..............	6.4	machine-hours
	Budgeted indirect labor.............................	$2.90	per machine-hour
	Budgeted supplies......................................	$1.50	per machine-hour
	Actual production......................................	1,300	poles
	Actual machine-hours................................	7,920	machine-hours
	Actual indirect labor (total).......................	$23,210
	Actual supplies (total)...............................	$13,297

    106. The variable overhead efficiency variance for indirect labor is:

            A)      $918 F

            B)      $1,160 F

            C)      $918 U

            D)      $1,160 U

           

            Ans:  B    

            Solution:

           

            Actual machine-hours: 7,920

Standard machine-hours: 8,320*

		Cost Formula (per MH)	Budget Based on 7,920 MHs	Budget Based on 8,320 MHs	Efficiency Variance
	Variable overhead costs (Indirect labor)........................	$2.90	$22,968	$24,128	$1,160 F

*1,300 poles × 6.4 machine-hours per pole = 8,320 machine-hours

    107. The variable overhead efficiency variance for supplies is:

            A)      $817 F

            B)      $1,417 U

            C)      $600 F

            D)      $817 U

           

            Ans:  C    

            Solution:

           

            Actual machine-hours: 7,920

Standard machine-hours: 8,320*

		Cost Formula (per MH)	Budget Based on 7,920 MHs	Budget Based on 8,320 MHs	Efficiency Variance
	Variable overhead costs (Supplies)..................................	$1.50	$11,880	$12,480	$600 F

*1,300 poles × 6.4 machine-hours per pole = 8,320 standard machine-hours

Use the following to answer questions 108-109:

Quickle Corporation, which produces commercial windows, has provided the following data:

	Budgeted production.................................	1,000	windows
	Actual production......................................	1,200	windows
	Standard machine-hours per window........	7.0	machine-hours
	Budgeted machine-hours (7.0 × 1,000).....	7,000	machine-hours
	Standard machine-hours allowed for the actual output (7.0 × 1,200).....................	8,400	machine-hours
	Actual machine-hours................................	7,750	machine-hours

	Budgeted variable overhead cost per machine-hour:
	Supplies.....................	$8.40	per machine-hour
	Actual total variable overhead costs:
	Supplies.....................	$68,595

    108. The variable overhead spending variance for supplies is:

            A)      $3,495 F

            B)      $1,965 U

            C)      $3,495 U

            D)      $1,965 F

           

            Ans:  C    

            Solution:

           

            Budgeted machine-hours: 7,000

Actual machine-hours: 7,750

Standard machine-hours allowed: 8,400

		Cost Formula (per MH)	Actual Costs Incurred 7,750 MHs	Budget Based on 7,750 MHs	Spending Variance
	Variable overhead costs (Supplies).................................	$8.40	$68,595	$65,100	$3,495 U

    109. The variable overhead efficiency variance for supplies is:

            A)      $5,460 U

            B)      $1,965 F

            C)      $5,460 F

            D)      $1,965 U

           

            Ans:  C    

            Solution:

           

            Budgeted machine-hours: 7,000

Actual machine-hours: 7,750

Standard machine-hours allowed: 8,400

		Cost Formula (per MH)	Budget Based on 7,750 MHs	Budget Based on 8,400 MHs	Efficiency Variance
	Variable overhead costs (Supplies).................................	$8.40	$65,100	$70,560	$5,460 F

Use the following to answer questions 110-111:

Geschke Corporation, which produces commercial safes, has provided the following data:

	Budgeted production.....................	8,500	safes
	Standard machine-hours per safe..	9.1	machine-hours
	Standard supplies cost...................	$1.70	per machine-hour
	Actual production..........................	8,700	safes
	Actual machine-hours....................	79,100	machine-hours
	Actual supplies cost.......................	$123,642

    110. The variable overhead spending variance for supplies is:

            A)      $10,828 F

            B)      $10,947 U

            C)      $10,828 U

            D)      $10,947 F

           

            Ans:  A    

            Solution:

           

            Actual machine-hours: 79,100

Standard machine-hours: 79,170*

		Cost Formula (per MH)	Actual Costs Incurred 79,100 MHs	Budget Based on 79,100 MHs	Spending Variance
	Variable overhead costs (Supplies).................................	$1.70	$123,642	$134,470	$10,828 F

*8,700 safes × 9.1 machine-hours = 79,170 standard machine-hours

    111. The variable overhead efficiency variance for supplies is:

            A)      $10,947 F

            B)      $119 U

            C)      $10,947 U

            D)      $119 F

           

            Ans:  D    

            Solution:

           

            Actual machine-hours: 79,100

Standard machine-hours: 79,170*

		Cost Formula (per MH)	Budget Based on 79,100 MHs	Budget Based on 79,170 MHs	Efficiency Variance
	Variable overhead costs (Supplies).................................	$1.70	$134,470	$134,589	$119 F

*8,700 safes × 9.1 machine-hours = 79,170 standard machine-hours

Use the following to answer questions 112-113:

Bagley Company has a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine-hours. The company has provided the following data concerning its manufacturing overhead costs for last year:

	Actual total overhead cost.........................	$260,000
	Budgeted fixed overhead cost...................	$180,000
	Variable overhead rate..............................	$2	per hour
	Fixed overhead rate...................................	$6	per hour
	Standard hours allowed for the output......	32,000	hours

    112. The volume variance for the year was:

            A)      $12,000 F

            B)      $4,000 F

            C)      $4,000 U

            D)      $16,000 U

           

            Ans:  A     LO:  6    

            Solution:

           

            Fixed overhead rate = Budgeted fixed overhead cost ÷ Denominator activity level

= $6 per hour = $180,000 ÷ Denominator activity level

Denominator activity level × $6 per hour = $180,000

Denominator activity level = $180,000 ÷ $6 per hour = 30,000 hours

Volume variance = Fixed portion of predetermined overhead rate × (Denominator hours − Standard hours allowed)

= $6 per hour × (30,000 hours − 32,000 hours)

= $6 per hours × 2,000 hours = $12,000 F

    113. The denominator activity level used to compute predetermined overhead rates was:

            A)      32,000 hours

            B)      22,500 hours

            C)      30,000 hours

            D)      it is impossible to determine from the data given

           

            Ans:  C     LO:  5    

            Solution:

           

            Fixed overhead rate = Budgeted fixed overhead cost ÷ Denominator activity level

$6 per hour = $180,000 ÷ Denominator activity level

Denominator activity level × $6 per hour = $180,000

Denominator activity level = $180,000 ÷ $6 per hour = 30,000 hours